So I lost quite some money in my 3rd pillar deposit since beginning of the year. My question is should I pull out before all th money is gone?
Thanks.
No!! Keep on buying. Don’t be that guy who buys high and sells low.
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If you actually think this very recent development is going to matter when you cash out in 10+ years, then (i assume you viac asset allocation is mainly equity / not cash) a large equity fraction might not me the right asset allocation for you.
If you worry about that at night, get some more conservative like 50:50 or even less equity, until you dont bother about market movements anymore.
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My strategy is Global 100. Does it make sense to switch to Global 40 or 20 at the moment? Then switch back to 100 when it gets better?
That is market timing. Market timing doesn’t improve risk adjusted performance. So my recommendation is to just wait.
This is just volatility that is expected, maybe markets overreacted to the news or maybe they still underestimate the impact of the virus on the world market, nobody really knows the answer to that.
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No critic, do not take it bad:
- Bad choice: you invested before having a clear plan for various situations
- Good choice: you asked here before acting
Assuming you knew at time of investing in 100 global you would invest for long time, as of today you are still looking long time. So do NOT (NEEEEVER) change your assets allocation bc of market changes…you will inly lose! Change your asset allocation only bc of life changes (lower risk tolerance as you get older, no job anymore, new family) etc.
Now is the worst time to sell stocks!
If you are not convinced please ask again.
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I do not take it bad. Do not worry.
The reason I wrote this post is that I want to hear from experts.
So what would be a clear plan? I could choose the strategy and then change it at the next rebalancing period. Not a lot of space to wiggle around. And you say do not change.
Set your asset allocation for long term so that you can sleep well both during booms and busts. If the crash occurs just keep buying regularly (if you can, buy extra as it is sell off). Never sell on crash. That’s it.
If you need help choosing your asset allocation, i suggest you have a look at the links below. Nota bene: as a chf investor bonds are not interesting, so that would be cash.
https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations
https://personal.vanguard.com/us/FundsInvQuestionnaire
https://www.bogleheads.org/wiki/Main_Page
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OK, thanks everyone. I will not change anything and have a look at the links provided.
Quite a few backtests would say otherwise.
First random example from google- https://seekingalpha.com/article/4079476-10-market-timing-strategies-compared
(Of course, whether you trust them to not be overfit is a different matter. That’s the big problem with quantitative long-term finance - too little uncorrelated data)
This week is anything but normal! Volatility is up through the roof. A true black swan.